Well, well, well. What a week.
For those who are interested in Brexit, I am currently writing a short paper on the topic that I hope to make available via the Blog.
Right now, however, I want to cover political issues closer to home. Specifically, the release of the ATAP report. What is ATAP? Well, it’s simply a collaboration between Auckland Council, Auckland Transport, and Central Government that is designed to align plans for transport in Auckland. Not a bad idea.
ATAP recently released a report that has breathed fresh life into the road pricing debate. As many of you will know, TransportBlog has over the years expressed qualified support for the idea of road pricing. While we think it’s important to carefully consider 1) distributional impacts; 2) revenue neutrality; and 3) complementary transport investments (of all modes), these issues should not be allowed to scuttle discussion and research into road pricing. The potential benefits of road pricing are simply too large to ignore, IMO.
Not everyone, however, seems happy with ATAP’s recommendation that road pricing be investigated in the Auckland context. In this post I’m going to review statements made by three political parties in response to the ATAP report. In future posts, we hope to cover some of theory behind road pricing in more detail, and consider their implications for road pricing in Auckland.
1. The Government – Simon Bridges
In the past few years I’ve been somewhat critical of the Minister, as evidenced by posts on Bridges’ bridges and subsidies for electric lemons. We’ve also criticized the ineffective mega-motorway projects this Government has promoted, such as the East-West Link and Auckland Waitemata Harbour Crossing.
On the other hand, I’ve really been impressed with Bridges’ comments on road pricing, which have been refreshingly candid, informed, and balanced. Here’s a selection of what Bridges has had to say about the ATAP report in general, and road pricing in particular (source):
In the short term, more roading and public transport may … be necessary,” Mr Bridges told the Herald. “But that alone isn’t enough. We can’t keep building new lanes on highways.
We will need a combination of demand-side interventions if we are going to deal with congestion over the next couple of decades.
When pressed on his Government’s tepid support for road pricing in the past, Bridges made the following comment:
Asked why the change of heart, Mr Bridges said: “It is the evidence. What’s been shown quite clearly here is that a combination of technology, including pricing, can dramatically lessen congestion on the network.”
In the same interview, Bridges noted that (1) road pricing was intended to manage demand, not raise revenue (even if the revenue could be used to accelerate some specific projects) and (2) road pricing would only be introduced over a period of 10 years, if further research found it to be effective. In these comments, Bridges demonstrated:
- An awareness that supply-side transport interventions will not, on their own, be a cost-effective way to manage the growth in travel demands Auckland is experiencing;
- A willingness to engage with complex issues, and to change his position if doing so is justified by evidence. This is something that is often hard for politicians to do, and I think is something to celebrate when such changes are based on new evidence coming to light;
- An acceptance that if road pricing is implemented, then it should be to manage demand – not raise revenue. This is an approach the Blog has supported for many years.; and
- An understanding that several years of research and discussion are necessary before road pricing can be implemented.
In short, I thought Bridges’ comments were candid, informed, and balanced. Bravo. The two issues he doesn’t appear to discuss in detail was (1) distributional impacts, although further research would seek to clarify the nature of these impacts and (2) the need for complementary transport investments to manage anticipated demands from road pricing. While there’s still room for improvement, it’s heartening to seem Bridges take a somewhat bold position on an important issue.
2. The Labour Party – Phil Twyford
Now for a different perspective. In response to the ATAP report, Labour Party MP Phil Twyford commented as follows (source):
The Government wants to tax Aucklanders thousands of dollars a year just to use the motorway network … the average Aucklander … would pay new congestion charges of between $185 and $2461 per year.
National has allowed the gridlock on Auckland roads to get steadily worse over the past eight years, leaving Aucklanders to sweat it out daily in traffic jams … Now they want to whack commuters with a massive tax for the privilege of using a road network that they’ve already paid for with their petrol taxes and road user charges.
I feel Twyford is being overly dramatic, and would like to clarify a few relevant issues from my perspective:
- The last Labour Government also looked into road pricing; you can still find the reports here. While it ultimately didn’t go anywhere, ATAP is simply a continuation of a debate that started under Labour. In the intervening decade, technology has of course improved considerably.
- In a revenue neutral situation, the revenue from road pricing would be used to reduce taxes elsewhere. Or increase welfare payments to low income households. Until we know the precise details of the scheme, we won’t know who wins/loses, or to what degree, so any statements to this effect are simply premature.
- As the ATAP report shows, government spending on transport in Auckland has increased to approximately 2.5% of GDP. This is high by historical standards, and more than most OECD countries. In a nutshell? Both Labour and National have spent buttloads on transport in recent decades; the supply side has received plenty of attention.
- Transport projects take time to design and construct. Most of the highway projects being completed now were planned under the last Labour Government, even if they have been accelerated under National. Thus, you cannot blame all of today’s problems on National; the transport system reflects decisions made over decades.
- The road network is never “paid for”, at least not in the way that Twyford implies. Operating costs, the opportunity cost of land, capital improvements, and externalities, such as congestion, noise, and air pollution, are all examples of costs associated with roads that are incurred continuously over time.
On the other hand, it is true that this Government has spent billions on relatively ineffective road projects, such as Puhoi-Wellsford, SH18-SH1 connection, the East-West Link, and Kirkbridge Rd grade separation. These projects do little for congestion compared to their costs, and is something that Twyford is justified in criticising.
Twyford also had this to say:
Without a massive improvement to the public transport system as a viable alternative to driving on the motorways at peak hours, it would be utterly unfair to charge people thousands of dollars extra a year …
The first thing I want note is that it’s not immediately clear road pricing requires complementary public transport investment. The experience in London and Stockholm, for example, was that road pricing caused a ~20% reduction in vehicle travel but only a small shift to PT. In London’s case buses were the big beneficiary of less congested roads, as you can imagine. Personally, I’d expect road pricing would justify some selective investments in PT, but this shift should not be overplayed. The second thing to note is that the statement is duplicitous. Why? Well, the ATAP report considers how road pricing impacts on the demand for PT, and identifies where PT infrastructure and services may need to be improved. Put simply, the ATAP report does not present road pricing as a standalone solution, but instead considers it as part of a wider transport plan. As it should be.
Some of the issues with Twyford’s argument are highlighted in this Radio New Zealand interview, in which he moderates some of his positions under pressure by the interviewer. Twyford makes an excellent point with respect to the North-western Busway: It does seem to be a clear situation where road pricing might create the need for a project to be accelerated.
One other issue worth considering: In a recent press release, Twyford advocated for removing Auckland’s urban growth boundary and shifting costs on developers (NB: evidence suggests costs will ultimately be paid for by occupants, but that’s besides the point). ATAP shows that even with additional infrastructure investment, Auckland would still experience ongoing congestion. The latter might even worsen without an urban growth boundary. So while getting rid of regulations is well and good, it won’t mean congestion disappears. To put it another way, changing the way we fund transport infrastructure from rates to development taxes doesn’t mean that demand management is not beneficial.
Ultimately, I think Twyford needs to take a longer-term perspective on the issue of road pricing. Rather than trying to assail the Government to shut the conversation down, Twyford should be supporting the need for a 5-10 year investigation that gives serious attention to distributional impacts and complementary transport investments. I really don’t see any reason to get emotional before the details of possible schemes are worked through.
3. The Green Party – Julie-Anne Genter
In this interview Genter advances the Green Party’s position on ATAP’s road pricing proposal and also argues for more investment in public transport before road pricing can be implemented. As noted above, I suspect this issue tends to be over-played, simply because the benefits of road pricing don’t necessarily require huge mode shift, as Stockholm and London demonstrate. There’s also several other reasons to push back on the notion that road pricing is not a priority until public transport is improved.
The first reason is that investment in public transport won’t reduce congestion for those who continue to travel by car. In a city that is growing as fast as Auckland, even massive investment in public transport won’t maintain vehicle demands at present levels. By extension, even with significant public transport investment, there will be many, many vehicle trips that will continue to suffer from congestion. Commercial vehicles being a prime example: Why leave these vehicles sitting in congestion, when they are prepared to pay for faster and more reliable travel? One of the key benefits of road pricing is that it enables commercial vehicles to do their thang. And that generally benefits all of us.
The second issue is that, as noted above, ATAP does consider complementary transport investments to support road pricing. There is probably sufficient time between now and when road pricing is implemented to complete the CRL, extend electrified rail services to Pukekohe, progress extension of the Northern and AMETI busways, and construct key elements of the North-west busway. It may even be possible to implement LRT on Dominion Rd within 10 years. Auckland will within 10 years have a much better bus network with higher frequencies and capacity. Now, I appreciate completing all these projects would require a change in Government priorities, and that it’s important to highlight this need, but such things are kind of what the ATAP process is all about. Of course, if and when PT investments are rolled out, we may find that we can delay implementing road pricing, which is all well and good – but the opportunity to avoid road pricing through PT investment shouldn’t stop us (a priori) from discussing how we might implement road pricing.
Basically, I’m suggesting that the Greens should express conditional support for the idea of road pricing, subject to more detail on the nature and timing of its implementation. I don’t think saying “it’s not a priority we should do other things first” is a sufficiently strong reason to object to the recommendations of the ATAP report, at least at this stage.
All in all I am happy to see the road pricing debate reinvigorated. I’m particularly impressed with comments from Simon Bridges, which are candid, informed, and balanced. Twyford and Genter are justified in highlighting that (1) implementing road pricing will likely require some complementary transport investments and (2) this will likely require the Government place a greater emphasis on public transport than the have in the past.
On the other hand, the positions adopted by both Labour and the Greens come across as overly negative. While I can appreciate this is the general nature of political opposition in New Zealand, I feel that they might want to step back from the political coal face on this particular issue. Road pricing is not a discussion that needs to be rushed, nor should it be shut down. It seems to me that the more reasonable position is to express conditional support, with some specific caveats on where the ATAP research should head.
As something that will take several years to develop, we have the chance to discuss the nitty gritty of road pricing means in the Auckland context without committing to anything. Why fall into hard and fast negative positions before then?